SUNNYVALE -- They traveled 1,300 miles and toiled long hours, earning the equivalent of $2.66 an hour in Mexican pesos while working in the Bay Area for acclaimed Silicon Valley tech startup Bloom Energy.

"It wasn't right what they were doing. It's not the way to treat people," said a former Bloom Energy contractor who claims he blew the whistle to authorities about the company's mistreatment of the workers, who were brought to this country on visitor visas from the Bloom Energy plant in Chihuahua.

"The first complaint I heard was from someone who said, 'I don't know why I came up here. I could be down there making the same money and be with my family,' " said the contractor, who spoke to this newspaper but did not want to be named for fear of jeopardizing future job prospects.

Jared Belnap takes a closer tool at the set of Bloom Energy Servers at Ebay headquarters in San Jose Wednesday February 24, 2010 during a tour after the event unveiling the server technology. The Bloom Energy Server is a solid oxide fuel cell (SOFC) technology that provides power generation and would enable homes and businesses to generate their own electricity. The servers on the Ebay campus produce electricity to power space for 2,000 to 3,000 employees and Ebay has apparently saved $100,000 in electricity costs. (Pauline Lubens/San Jose Mercury News)
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Bloom Energy, which has won national attention for its innovative fuel-cell technology, boasts a board of directors that includes former U.S. Secretary of State Colin Powell and prominent venture capitalist John Doerr. Officials announced this week that the firm was ordered to pay $70,000 in back wages, damages and fines in a case that Labor Department official Ruben Rosalez called "appalling."

The company and its attorney did not respond to several requests for comment Wednesday.

U.S. officials said the Mexican workers, who did welding and other manufacturing jobs, came here on a type of visa that generally doesn't allow the holders to work while they are here. Investigators also determined that Bloom Energy paid other temp workers, who were from the United States, at wages that met the legal requirements.

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"It was clear the employer had knowledge of labor laws," said Labor Department spokeswoman Deanne Amaden.

Authorities said Bloom Energy paid the Mexican workers in pesos by wiring funds back to bank accounts in Chihuahua. Bloom also paid for the men to stay in a Sunnyvale motel and provided each with a meal stipend of $50 a day.

But their pay amounted to less than a third of the minimum wage required under federal law, Amaden said. Labor investigators also found the men worked an average of 51 hours a week but were not paid the legally required overtime rate when they worked beyond 40 hours a week.

The men were given a few days of training and then put to work alongside U.S. workers for about three weeks, before being sent back to Mexico in a cycle that was repeated several times, the whistle-blower said. Labor officials said the men moved back and forth between Chihuahua and Sunnyvale as they were needed, over the past two years.

Bloom Energy has a 74,000-square-foot manufacturing facility in Chihuahua, according to the Facebook page of a Mexican company called Intermex Industrial Parks, which says it built the facility for Bloom in 2011.

Intermex apparently played some role in recruiting the workers, added Labor Department spokesman Jose Carnevali. But he said U.S. officials determined Bloom Energy was liable for the Mexican workers based on several factors, including the fact that Bloom directed their work in Sunnyvale, and because Bloom paid for their motel rooms and issued them work clothing with Bloom's logo.

Efforts to reach an Intermex representative were unsuccessful Wednesday.

While the case produced relatively minor penalties, the workers will receive back wages and damages ranging from about $1,200 to $12,000 each. Amaden said the action shows her agency believes it's important to protect workers from being exploited and "to make sure we're providing a level playing field" for competing companies that follow state and federal wage laws.

Fireman's Fund Insurance Company's new Bloom Energy Servers in front of the Novato campus. Novato, Calif. on Monday, June 27, 2011. (Special to the IJ/ James Cacciatore)
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"We have not seen this elsewhere in the tech industry, and to our knowledge this is not a common practice," she added.

Bloom has reportedly raised $550 million in venture funding since it started in 2002. It opened a new facility in Delaware last year and said then that its workforce had grown to about 1,000.

Immigration officials said they have no record of any public enforcement action against either Bloom Energy or Intermex, although they said they could not comment if any investigation was pending.

"While there are circumstances under which welders could enter the U.S. on valid nonimmigrant visas to work, that would be uncommon," said Sharon Rummery of the U.S. Citizenship and Immigration Services agency. She added, "We won't speculate on actions of any specific company in securing foreign workers."